A4.3-1

Appendix 4.3

The Rapidly Changing E-Cigarette Marketplace

Consolidation of the E-Cigarette Companies A4.3-2

Major Players in the E-Cigarette Market A4.3-2

E-Cigarette Trade Organizations and Partnerships A4.3-2

Reference A4.3-3

List of Figures

Figure A4.3-1 Market share of e-cigarette products A4.3-3
A Report of the Surgeon General

A4.3-2 Appendix 4.3

Consolidation of the E-Cigarette Companies

Since 2011, e-cigarette companies have consolidated 

rapidly, led by companies in the conventional cigarette 

business and a few independent e-cigarette companies. 

Table 4.3 in the main narrative of Chapter 4 summarizes 

the major mergers, formations of partnerships, and acquisitions (M&As) that could be documented by January 2016. 

The first major M&A came in 2012 when Lorillard purchased the blu brand, the leading e-cigarette brand in the 

United States at that time, for $135 million. Since then, 

most of the major cigarette companies have made acquisitions in the e-cigarette market. Figure A4.3-1 uses figures from retail channels, tracked by Nielsen, to compare 

sales of e-cigarettes between companies manufacturing 

conventional cigarettes (Altria, Reynolds American) and 

independent e-cigarette companies. By the end of 2014, 

more than 65% of e-cigarette sales in traditional retail 

establishments were from the major cigarette companies, 

which included Altria and Lorillard (now part of Reynolds 

American), as shown in the figure. Sales in retail establishments for independent e-cigarette companies declined 

in 2014, and their market share shrank to less than 35% of 

the total. 

Independent e-cigarette companies, such as the 

Electronic Cigarettes International Group, Ltd. (ECIG 

Ltd.), have also played an active role in M&A activities. 

ECIG Ltd., headquartered in Grand Rapids, Michigan, is 

not to be confused with the Electronic Cigarette Industry 

Group, Inc. [ECIG Inc.], which is based in Tallahassee, 

Florida, and will be discussed later). ECIG Ltd.’s $170 million acquisition of FIN Branding Group LLC in 2014 is 

one of the largest transactions to date among e-cigarette 

companies. However, ECIG Ltd. has since scaled back its 

M&A activities because of intensified competition from 

the major cigarette companies and its failure to secure 

additional capital to finance further expansion.

Major Players in the E-Cigarette Market

As a result of the M&A activities discussed above 

and through the development of their own e-cigarette 

products, the leading cigarette companies are now major 

players in the e-cigarette market, at least in traditional 

retail establishments. In addition, independent, publicly traded e-cigarette companies (e.g., ECIG Ltd., Vapor 

Corp, MCIG [Mainstream Cannabis Innovations Group]), 

and independent privately owned e-cigarette companies 

(e.g.,  NJOY, Ballantyne Brands [Mistic], CB Distributors 

Inc., International Vapor Group, VMR) play an important 

role in the market. A few companies that specialize in a 

specific area in the industry—such as e-liquids (Johnson 

Creek), flavorings (Flavoriq), batteries (EVE Energy Co., 

Ltd), nicotine solutions (Liquid Nicotine Wholesalers, 

USA Liquid Nicotine), and e-liquid solution bases 

(Essential Depot)—also play key roles in determining the 

dynamics and development of the e-cigarette market. In 

addition, China-based e-cigarette manufacturers support 

the industry by producing and supplying the majority of 

e-cigarette devices and parts on the market. Appendix 4.1 

presents a detailed description of the major players within 

the e-cigarette industry, their roles in the market, main 

characteristics, and the types and brands of their primary 

product.

E-Cigarette Trade Organizations and Partnerships

As the efforts of e-cigarette advocates and the initiatives of consumer advocacy groups have coalesced, 

several organizations have emerged. Descriptions of the 

e-cigarette trade organizations and advocacy groups are 

found in Appendix 4.2. The Smoke Free Alternatives Trade 

Association (SFATA), the American Vaping Association 

(AVA), and the Tobacco Vapor Electronic Cigarette 

Association (TVECA) are trade organizations that are 

proponents of e-cigarette manufacturers, distributors, 

and retailers. The Consumer Advocates for Smoke-free 

Alternatives Association (CASAA) originated as an online 

forum that became a nonprofit consumer advocacy group 

with a 501(c)(4) status and a similar mission. The American 

E-Liquid Manufacturing Standards Association (AEMSA), 

was established in 2012 to advocate for self-regulation of 

e-cigarette liquids and is a 501(c)(6) organization. Finally, 

the previously mentioned Electronic Cigarette Industry 

Group, Inc. (ECIG Inc.) is an industry membership association with 501(c)(6) status that works on behalf of 

e-cigarette companies. Little research has been conducted 

to date, however, to investigate how industry organizations are influencing market activities and public policies 

at the federal, state, or local levels.
The Rapidly Changing E-Cigarette Marketplace A4.3-3

E-Cigarette Use Among Youth and Young Adults

Figure A4.3-1 Market share of e-cigarette products

Source: Huang and Chaloupka (under review).

ablu is included as part of Lorillard from Quarter 2, 2011 to Quarter 2, 2012, although Lorillard did not acquire blu until April 2012. 

Reference

Huang J, Chaloupka FJ. Rapidly Changing Electronic 

Nicotine Delivery Systems (ENDS) Market (working 

paper). Chicago (IL): University of Illinois at Chicago, 

under review.